A development debate

Print edition : February 02, 2002

An international conference in Kolkata discusses issues of agrarian reforms and rural development in the context of globalisation.

VENKATESH ATHREYA

AT a time when the governments at the Centre and in several States are falling over themselves to curry favour with the captains of global finance and industry, the Left Front government of West Bengal has done something rather different. It invited scholars from several countries to discuss and share their views on issues of agrarian reforms and rural development in the context of globalisation and to reflect critically on the experience of West Bengal in this regard, with a view to move forward in tackling issues of agrarian growth and rural development in the State. The conference, held in Kolkata from January 3 to 7, 2002, was attended by scholars from India, Bangladesh, Brazil, China, Cuba, the United Kingdom, Mexico, the Netherlands, South Africa and Vietnam. They discussed papers covering theoretical issues and a number of empirical studies.

IN an important survey of theoretical arguments on and empirical experience of land reforms in both socialist and non-socialist countries under different historical circumstances, Keith Griffin, Professor, University of California Riverside, and his co-authors made a strong case for redistributive land reform. However, their tendency to privilege family farms as the bearers of efficient agriculture did not find much acceptance in the conference.

At the conference venue in Kolkata. The deliberations at the conference held out important lessons for policy-makers in New Delhi.-AMIT KAR

In his paper on the paths of capitalist agrarian transition, Terry Byres, Professor, School of Oriental and African Studies, University of London, made the point that during the pre-1945 era of colonialism, capitalist penetration of colonies and semicolonies, which is what most of the contemporary poor countries then were, "left in its wake economic backwardness and pervasive rural poverty: in agriculture, by and large, very limited development of the productive forces and, in many places, virtual stagnation. Capitalist industrialisation, moreover, was negligible". He suggested that capitalist agrarian transition in Latin American countries, if it completed its course at all, was likely to be landlord-led, while in Asia it was much more likely to be peasant farmer-led. In all cases of agrarian transition in the contemporary world, the state would have to play an important role, he said.

The paper by Amiya Kumar Bagchi, RBI Professor of Economics, Centre for Studies in Social Sciences, Kolkata, on the relationship between land reforms, egalitarianism and human development made the point that thoroughgoing agrarian reforms were needed not only to achieve higher economic growth but to put an end to all forms of oppression, including caste- and gender-based oppression. That would also entail a struggle against neoliberal globalisation, which was opposed to egalitarian redistribution of productive assets, he said.

In a crisp contribution, Prabhat Patnaik, Professor, Centre for Economic Studies and Planning, Jawaharlal Nehru University (JNU), New Delhi, brought out the point that the terms of trade between primary commodities (which account for the major proportion of the exports of developing countries) and manufactured products (which dominate the import basket of these countries, and are mostly imported from advanced capitalist countries) move against the former not only on account of conditions in the respective product markets, such as a high and increasing degree of monopoly of manufactured product exports by a handful of advanced country-based multinational corporations but also because of the tendency for exchange depreciation of poor country currencies in a regime of financial globalisation and liberalisation. This is because of the asymmetric behaviour of finance capital from the metropolitan countries of the North, which tends to leave the poor countries at the first sign of economic or political vulnerability but does not necessarily respond positively to incentives to invest via higher real interest rates. This argument strengthens the case for imposing controls on the capital account of the balance of payments.

Prabhat Patnaik's point about the deflationary implications of financial globalisation was elaborated in Utsa Patnaik's cogently argued paper, which brought out the devastating effects of the policies of liberalisation and globalisation on the economy as a whole and agriculture in particular. These policies are pursued in a number of Latin American, African and Asian countries under the tutelage of economists from the Bretton Woods institutions - the World Bank and the International Monetary Fund (IMF) - and, now, the World Trade Organisation (WTO).

Specifically discussing the Indian case, Utsa Patnaik, Professor, Centre for Economic Studies and Planning, JNU, highlighted the connection between the policies of financial and trade liberalisation in a regime of structural adjustment on the one hand, and the suicides by a large number of weavers and cotton farmers in States such as Andhra Pradesh and Karnataka on the other. She convincingly argued the case for doing away with the targeted public distribution programmes. Even as huge foodgrain stocks are rotting away in godowns and open yards, a fetishistic belief in the discredited principles of pre-Keynesian "sound finance" not merely paralyses the government into inaction (or worse) on rural employment and development programmes, but actually causes it to move perversely in the direction of making the foodgrains inaccessible to a large population that needs it.

IN her paper on Mexico's agriculture in a global context, Kirsten Appendini from El Colegio de Mexico, Mexico City, argued that the major institutional reforms aimed at changing Mexico's agrarian structure "were implicitly aimed at dismantling the peasant sector by ending agrarian reform and withdrawing support to ejido agriculture (which) to an important extent (was) based on maize cultivation".

In a careful historical account of agrarian reform and change in Chile, Cristobal Kay, Associate Professor of Rural Development, Institute of Social Studies, the Netherlands, discussed the attempts to provide a "human face" to neoliberal reforms in Chile after the restoration of democracy. He finds that Chile's significant economic growth in recent decades has been primarily through the rapid exhaustion of its natural resources, especially minerals, and not through sustainable technological advance. This has serious negative environmental implications. The kind of rural development that has taken place has also privileged large capitalist farmers, while marginalising small farmers, wage labourers and women. While Kay is evidently in favour of a pro-poor policy that is supportive of small and middle peasant farmers, wage labourers and women, it is far from clear whether the class composition of the Chilean regime will permit it to move in such a direction.

The paper by Marcos A. Kowarick, Regional Secretary, State of Maranhao, Brazil, reviewed the achievements and limitations of Brazil's agrarian reforms since the exit of the military dictatorship in 1985 and focussed on the challenges posed by the liberalisation and globalisation of Brazil's economy in this regard.

In a review of a World Bank publication on the market-based land reforms policies in Latin America, Africa and Asia, M. Riad El-Ghonemy, Senior Research Associate, International Development Centre, University of Oxford, concluded that the prospects for these policies were gloomy. He also noted that in most instances these reforms had not implied any redistribution of wealth and that in some cases they might even have led to the redistribution of wealth from the poor to the rich.

In a study of the conditions of existence of landless manual worker households of Gokilapuram village in the Cumbam valley in Tamil Nadu at two different points in time, separated by a little over two decades - 1976 -77 and 1998-99 - V.K. Ramachandran, Professor, Indian Statistical Institute, Kolkata, and others demonstrated that even in this relatively agriculturally advanced region, "despite positive changes in wage rates and workers' earnings over the last two decades and more, chronic employment insecurity, low wages, very high levels of poverty and indebtedness and backward standards of living in general continue to be the lot of manual worker households".

In a review of land and agrarian reform efforts in post-apartheid South Africa, David Masondo, Economic Transform-ation Coordinator, South African Communist Party, concluded that "successful land and agrarian development in South Africa must be viewed as a long-term progress, where whatever incremental gains can be made, require popular participation for their success".

In a paper on Bangladesh, based on repeat studies of 124 villages covering 1,000 households at two different points in time - 1987-88 and 1999-2000 - Mahabub Hossain, Head, Social Sciences Division, International Rice Research Institute, Manila, and his co-authors found a "...transformation from agriculture to non-farm-based rural economy... facilitated by an improvement in human development and the development of rural infrastructure, particularly rural roads..." This somewhat rosy picture of rural economic change in Bangladesh was disputed by many participants on methodological grounds and the study itself admitted that rural income distribution in Bangladesh had become more unequal.

After examining the vicissitudes of agrarian reform in the Philippines from 1988 onwards, James Putzel from the London School of Economics and Political Science concluded that while half-hearted programmes could achieve "pockets of improvement" and perhaps improve the possibilities for future reforms, these came at the price of weak investment and growth in agriculture. Though Putzel conceded that the World Bank model of "negotiated reform" was unlikely to "...contribute substantially to reducing the causes of (rural) violence" - causes including, in Putzel's view, "conflicts over land and the inequalities inherited from history" - he called upon the Left to shed "old ideas" that "refuse to see the creative potential of capitalist markets for human progress". The call was unconvincing even as it implicitly set up a caricature of the Left as being always opposed to the use of the market as an instrumentality.

The paper by Abhijit Sen, Professor, Centre for Economic Studies and Planning, JNU, on recent trends in rural India with respect to agriculture, employment and poverty showed that there had been a slowdown in the growth of agricultural production and rural non-farm employment and the rate of reduction in rural poverty in the 1990s. Interestingly, the only States that performed very well in both agricultural production and growth of non-agricultural employment in the 1990s were West Bengal and Kerala, both with significant achievements in land reform, he noted. The data analysed by Sen also showed that restoring rural growth and sustaining it would require a major effort by the state, transcending presumed fiscal constraints.

The paper by Nirmal Kumar Chandra, Professor, Indian Institute of Management, on agrarian transition in Russia brought out the collapse of the economy under the neo-liberal policy regime, which has been in place now for a decade since the dismantling of the Union of Soviet Socialist Republics in 1991. The decade has seen a steep fall in gross domestic product, an even steeper fall in per capita income, and significant increases in both levels and rates of unemployment as well as in the number and proportion of people living in poverty. Chandra also cited data to show that, contrary to neo-liberal theology, private farms in Russia did not show a higher output per hectare than the collective farm enterprises called agro-industrial complexes.

IN his paper on the experience of the Communist Party of Vietnam, Nguyen Tan Trinh, Standing Vice-Chairman, Communist Party of Vietnam's Economic Commission, noted that Vietnam, like other socialist countries, had been constantly reviewing its agrarian policies. While progressive agrarian reforms in northern Vietnam have had a much longer history, right from 1943, the process of reforms began in the south only in 1975, after the achievement of national liberation. After an initial phase of collectivisation and active promotion of cooperative management of agriculture with the framework of centralised planning, Vietnam has moved towards the promotion of peasant farming within a framework of state ownership of land. The Land Law of 1993 determined that land is the property of the whole people and is subject to state administration. The state allocates land to organisations, households and individuals for long-term and stable use and also allows them to rent land. The paper expressed the view that in view of the economies of scale, the need for cooperative economy and cooperatives in rural areas will expand widely; and that the collective economic sector of farmers together with the state economic sector will become a foundation of rural development. Nguyen Tan Trinh noted that Vietnam had been transformed from a food-importing country into one that not only met its own needs but exported about four million tonnes of rice every year.

The Cuban experience in rural development, brought out in a comprehensive paper by Victor Manuel Figueroa Albelo, Professor, Universidad Central 'Marta Abreu' de Las Villas, Cuba, offered exceptionally rich lessons for poor countries seeking to develop their rural economies in the face of a highly unequal global economic order. On the eve of the 1959 revolution, this was what rural Cuba was like: "Sixty per cent of agricultural workers lived in huts made of guano palm with mud floors like the natives on the arrival of Columbus; 90.6 per cent lacked refrigerators or ice boxes; 41 per cent never attended school and 43 per cent were illiterate; their diet consisted mainly of rice, frijoles (beans) and vegetables; 11 per cent drank milk and 2 per cent ate eggs, and bread was unknown; finally, 14 per cent suffered from tuberculosis, 13 per cent became ill of typhoid and 36 per cent suffered from parasites."

Consequent to the agrarian reform programme of 1959, under which large landed property was taken over and distributed to peasants, the peasant sector came to own 41.1 per cent of all agricultural land, the state and cooperative sector around 35.7 per cent and the capitalist sector in agriculture accounted for only 23.2 per cent. By the end of 1964, with the nationalisation of the assets of north American as well as large national capitalists, the state's share rose to 66 per cent. After some ambitious efforts at rapid collectivisation between 1966 and 1974, Cuba adopted the path of voluntary cooperativisation. Based on the experience over the next two decades, and in order to respond to a dramatically new and very different external situation in the early 1990s following the collapse of socialism in eastern Europe and the USSR, Cuba implemented a major agrarian reform programme in 1993. It established "the sharing of land among cooperatives (the dominant regime), self-participating management in state farms of new type, private-individual in favour of people and families and private enterprise in association with the foreign capital".

Thanks to such a vigilant and continuous process of learning by doing, Cuba has managed to achieve an impressive level of human development in terms of education, health and other indicators of well-being in both rural and urban areas. It has done so in the face of sustained hostility and economic and technological sanctions against it by the world's biggest military and economic power.

It is well known that rural reforms in China since 1978, building on the experience of implementing the revolutionary land reforms of the 1950s and 1960s and correcting them in the light of experience, have led to impressive rural and agricultural growth. However, in a candid paper, Zhang Xiaoshan, Director, Institute of Rural Development, Chinese Academy of Social Sciences, Beijing, chose to highlight the current problems rather than past achievements. Though the percentage of persons below the poverty line in rural China was only 4.6 per cent in 1998 (as against figures close to 35-40 per cent in countries such as India), there are problems of "hidden unemployment" in rural China. Zhang's paper showed that the Chinese leadership was aware of the huge problems it would face in terms of employment and maintenance of growth, especially in the light of China's membership of the WTO.

DESPITE differences on a number of specific policy and implementation issues, there was a fair degree of consensus among the participants. These related, among other things, to the deflationary macroeconomic implications of financial globalisation; the need for the state to play an important role in ensuring that the power of the landed gentry is broken in the process of completion of land reforms and in ensuring the provision of non-land inputs to those who received land in the process of redistribution as well as in controlling external capital flows and promoting growth through macroeconomic policies; the importance of mobilising the rural poor along class lines to ensure that the gains of land reforms are realised and sustained; and the need for an autonomous national developmental framework within which to negotiate the challenges of globalisation.

Are the policymakers in New Delhi listening? Will they listen?

Venkatesh Athreya is Professor and Head of the Department of Economics, Bharatidasan University, Tiruchi.